Why China's Xiaomi Is Not A Copy Of iPhone

If Chinese smart phone maker Xiaomi succeeds in its mission, it may become known as the company that dispelled notions that China technology is a copy of western knowhow.
But there is still a hurdle to jump. Say Xiaomi, and most people think copy, not original. But as Xiaomi becomes better known in the West, that impression could change.
Or at least that’s according to early Xiaomi investor Hans Tung of GGV Capital. He sat down with me recently for an interview on Silicon Dragon Talk and shared his perspective on what makes Xiaomi an original.
He pointed to three key differentiators for Xiaomi:
Keep reading post at Forbes: onforb.es/1uhwcdY

 

One More US Startup Takes In Capital From China - This Time Xiaomi!

Wearable device maker Misfit may be gaining a significant competitive edge with its latest $40 million capital intake that includes Chinese smart phone leader Xiaomi making its first investment foray in the U.S.
Having a strategic China investor in its camp should help the San Francisco-based startup gain traction and scale up more quickly in the large Middle Kingdom market as expansion in Asia is prioritized.  With speed to market and China as increasingly important dynamics, this trend-setting investment could prove a big boost for Misfit, which already sells its waterproof activity tracker Shine in more than 35 countries.
It also can’t hurt to have one of the more innovative Chinese companies around on its side to build out its talent pool from China, where Misfit has a small software team to round out its team of nearly 100 people, most of them in R&D.
With this first investment in the U.S., Xiaomi is following an increasingly traveled path by the Chinese tech titans Baidu Baidu, Alibaba, Tencent and others of investing in U.S. tech businesses. View Silicon Dragon Talk on this trend and see prior Forbes post: Why U.S. startups are taking investment from China’s tech titans.
For the Chinese investor standpoint, this strategy helps them gain technology, talent and U.S. market experience in their long-term quest to expand outside their home market and build their base globally.  Their strategies bear little resemblance to the Japanese trophy seekers who bought American landmark  properties Pebble Beach and Rockefeller Center some two decades ago. Keep reading Forbes post:
http://www.forbes.com/sites/rebeccafannin/2014/12/04/1-more-us-startup-takes-in-capital-from-china-xiaomi/

All It Takes Is 1 Hong Kong Startup To Break Through

Amidst the buzz and energy surrounding Hong Kong’s push to become a hub for tech innovations, startups here are beginning to make waves, pulling in some big financings from venture capitalists and corporate venture investors, scaling up and expanding internationally.
Seeing these startups take off is an encouraging sign for Hong Kong, where young businesses have faced a financing gap to boost their operations and to pursue global ambitions.  While not sizeable rounds compared to the what we’ve been seeing in Silicon Valley or India lately, these recent venture financing in Hong Kong are still quite respectable.
Take the $14 million that innovative lending service WeLab hauled in this year from Sequoia Capital and Li Ka-Shing’s Tom Group. It was the first time that Sequoia Capital, a force behind many successful ventures in mainland China and Silicon Valley, has invested in a Hong Kong startup.
See tech chat video.
Keep reading Forbes post: Hong Kong breakthrough
 

Hong Kong Startups Get A Reality Check on Silicon Dragon Talk show

With all the recent buzz about the potential for Hong Kong startups to make it, it can be difficult to separate the hype from the reality.
I asked three experts investing in the Asian region and in Silicon Valley — Tytus Michalski of Fresco Capital, Melissa Guzy of Arbor Ventures and Simon Squibb of Nest — to put a microscope on the key trends and let us know what is really going on. See Silicon Dragon Talk: Hong Kong Reality Check.
There wasn’t exactly a consensus on whether Hong Kong entrepreneurs are naturally entrepreneurial, if there is enough startup capital from the right sources, and how much government support is the right amount.
Keep reading Forbes post: Reality Check

Founder of Shanghai Car Rental Service I Met In 2009 Takes His Startup Public on NYSE and Raises $120 Million

It’s interesting to see another of the high-powered Chinese startups I wrote about in Startup Asia  – Shanghai-based eHi Car Rental Services — go public in New York. The leading Chinese car rental service eHi debuted on the NYSE on November 18, raising $120 million, the first IPO to tap into the China economy since Alibaba in September.
I remember meeting the founder and CEO of eHi, Ray Zhang, a classic returnee to China with Silicon Valley entrepreneurial experience and computer science smarts, at his Shanghai office in 2010.  At that time, the operation he founded in 2006 was small but was on an exceptionally fast-growth track, expanding by 200 percent annually but still unprofitable. It still is losing money, by the way, despite taking in loads of venture capital and strategic investment while chasing the growth opportunity in China.
The son of a schoolteacher and scholar on Sino-US relations at the Hoover Institute on the campus of Stanford University, business didn’t seem to be a natural path for Zhang. But then again, how many opportunities come along to be in the driver’s seat on a fast-growth, still largely undeveloped market in the world’s fastest-growing economy? Zhang, an executive MBA graduate from the highly regarded CEBIS in Shanghai, knows eHi’s success depends on precise execution, timing and plenty of financing and strategic deals.
Continue reading post at Forbes: eHi Wheels into Wall Street

What's Hot/What's Not in Tech's Future

At our recent Silicon Dragon event in the Valley, we looked at what's hot, what's not in tech's future with Gary Matuszak who heads up KPMG's global TMT practice, and venture capitalists Osuke Honda of DCM and Carmen Chang of NEA. Yours truly (Rebecca Fannin) served as the moderator.
Please check out the video clip here:
 http://youtu.be/m5YYNMTmXQQ

Tesla Drives Into China With Big Aims to Make Its Plug-In Cars Mainstream

Tesla at Silicon Dragon in Shanghai

Tesla Motors has big plans for China, and you can bet its car sales in the Chinese market will likely top the U.S.
The innovative electric car maker from Silicon Valley will “replicate its American strategy in China,” says Shanghai-based Tesla executive Dan Hsu.  The first cars were delivered in April, and Hsu says he  hopes that Tesla sales will “be bigger” than in the U.S.  Certainly anyone who’s been to Beijing and encountered the smog shares that view.
Central to the strategy in China is keeping the price tag for the cars at about the same level as in the U.S. — at least if you don’t count import tariffs. The Tesla S sells for RMB 640,000 or $104,000 in China. That compares with about $70,000 for a Tesla S in the U.S.  Tesla strategy is to keep pricing the same globally.
To get going in China, Tesla has set up charging stations in China at shopping malls, restaurants and hotels. Tesla-owned retails outlets have the free super-charging stations too where Tesla can get fully charged in about an hour. At the Knowledge & Innovation Community in Shanghai, there are three charging stations in the parking garage.
Just as in the U.S., the main challenge in China is a shift in perception that the car is not a huge pain to recharge, says Hsu, speaking at Silicon Dragon in Shanghai.  (The car was on display and drew lots of curiosity seekers.)
Keep reading post at Forbes, Tesla in China.

What Makes Jack Ma Tick - And How He Built Alibaba

Alibaba’s successful IPO in New York brings back memories of interviewing founder Jack Ma in his hometown Hangzhou in 2006 long before his name was universally recognized – but well after he had saved Alibaba from failing in 2001.

Silicon Dragon author interviewing
Alibaba founder Jack Ma (circa 2006)
in his hometown Hangzhou

I learned a lot about Ma as an entrepreneur during that first interview for my book Silicon Dragon.  One of Ma’s more memorable quotes resonates today: ”When I am myself, I am happy, and have a good result.” Certainly true!
I also recall Ma telling me how he learned to think independently, at an early age. In 1985, he was invited by an Australian family he had become friends with in Hangzhou to spend a month in Australia with them on a summer vacation. It was an eye-opening experience. “Before I left China, I was educated that China was the richest, happiest country in the world. So when I arrived Australia, I thought, oh my god, everything is different from what I was told. Since then,” Ma told me,  ”I started to think differently.”
Keep reading post at Forbes: What Makes Jack Ma Tick

Friction Points for Alibaba As It Goes On Global Stage

It’s interesting to hear astute China-US venture investors Gary Rieschel of Qiming Ventures and Chris Evdemon of Innovations Works say they wouldn’t invest in Alibaba stock as the Chinese e-commerce company gets set to go public in New York late next week. With a portfolio full of Chinese tech startups poised to go public if Alibaba’s IPO does well, you would think they would be more rah-rah. But no.
“At a price of $160-$170 billion, I think they’ve already done enough to help other Chinese startups,” says Rieschel. “In my opinion, they’ve priced the company in a fairly rich way.”
A host of competitive pressures and strategic management issues at Alibaba in China and overseas could erode Alibaba’s value, he and Evdemon point out.
Within the Chinese market, challenges are building over increased rivalry from newly public e-commerce companies such as JD.com. “Everybody is out there to erode Aliababa’s share,” observes Evdemon, on Silicon Dragon Talk. “They cannot show any form of complacency.”’
Morever, Alibaba faces erosion in its seller fees as an increasingly number of larger merchants opt to spin off from handling transactions through the e-commerce company and instead handle trades independently. Alibaba’s counter? Merchants who are TMall clients face cut-off access to AliPay if they cancel, Rieschel notes, a tactic he says would be illegal elsewhere.
Such managerial issues point to new tension points for Alibaba outside China as expansion continues globally and strategic decisions are made. The issue will be whether Alibaba continues its comfort zone as a China company or moves up as a global player.
Read Forbes for full article: Not much love for Alibaba.

Alibaba Poised To Write $5 Billion Checks For U.S. Tech Startups

Alibaba’s IPO is set to have a big impact be on U.S. tech M&A deals and future listings from venture-backed China startups on Wall Street.  See Silicon Dragon Talk, Sizing Up Alibaba.
Referred to as the WalMart of China for its heft, the public listing of Alibaba will give it a huge treasure chest to acquire more U.S. tech startups and possibly write $5 billion to $10 billion checks, says venture capitalist Nazar Yasin of Rise Capital. Since 2013, Alibaba has invested in nine U.S. tech startups in deals valued at $968 million, according to investment banker David Williams.
VC Jay Eum of Translink Capital, which has seen three of its portfolio companies (Peel, Tango and Quixey) get acquired by the Chinese e-commerce giant, says he has been “super-impressed” by Alibaba as a strategic investor. He pointed to fairly generous deal teams and alignment with management to mutual benefit as two advantages.
The IPO of Alibaba, predicted to be the biggest in the tech sector, could lead to many more venture-backed Chinese startups to go public on Wall Street. This year, China IPOs have rebounded to 10 after a two-year slump.
See Silicon Dragon Talk, Sizing Up Alibaba.

Sizing Up Alibaba IPO Prospects Against Other Winners

As Alibaba gets ready to go public in the U.S. this September, it’s worth a look at how Internet players from emerging countries have fared in the public markets.
The answer is exceedingly well.  Research from San Francisco-based venture capital firm Rise Capital, which invests in emerging markets, shows that $300 billion in market value has been created in the last five years by e-commerce and media companies from developing nations.
Little surprise, most of those companies are from China. Russia, India and Brazil do factor in though, accounting for nine of the 35 in the top ranks.
Tencent is number one on the list with a market cap of $143 billion, figures dating from June 2014 show. Baidu ranks second at $66 billion. Alibaba rival JD.com is third, with a market cap of $35 billion.
If Alibaba hits the estimates of a $200 billion market capitalization, we’ll have to get out the measuring sticks again. Alibaba, which drawfs Amazon and eBay for merchandise sold through its multiple business and consumer sites, could rank up there among the top 10 U.S. tech firms by market valuation — and also surpass Tencent. Bets are on too, that Alibaba will bypass Facebook as the biggest tech IPO ever in the U.S.

Keep reading: Alibaba prospects
http://www.forbes.com/sites/rebeccafannin/2014/08/14/sizing-up-alibaba-prospects/

Silicon Dragon Talk Launches from the Valley

Guests at Silicon Dragon Talk:
Hans Tung, Eric Feng, Geoff Yang

We recently launched Silicon Dragon Talk, our new monthly program featuring trends in venture capital and tech innovation globally.

The first program featured three experts discussing Alibaba's IPO, Flipboard's Chinese strategy, and trends in China tech entrepreneurship.

Here is a clip from the first Silicon Dragon Talk show, with guests Hans Tung of GGV Capital, Eric Feng of Flipboard, and Geoff Yang of Redpoint Ventures.

Eric is sporting a special T shirt -- GoLong. It's a reference to VCs strategies of keeping a portfolio investment until it ripens.

Our shows are being recorded at the DingDing.TV studios in Santa Clara, CA. Stay tuned for the next program!

-- Rebecca
  

Flipkart's $1 Billion In Funding Puts India Startups In The Big Leagues

More proof of India’s rise as one of the Silicon Valleys of the world can certainly be seen in the latest mega venture financing of leading Indian e-commerce startup Flipkart. With $1 billion in new funding, Flipkart joins the big leagues for not only the largest amount raised by an Indian company but among the largest for an e-commerce company globally.
I’ve been writing that this Silicon Tiger nation would catch up to China’s Silicon Dragon, and the evidence keeps piling up. Flipkart raised the sum from Singapore’s sovereign wealth fund, GIC, as well as existing investors including Tiger Global Management, Naspers, Accel Partners and Morgan Stanley Investment Management. This latest deal for Flipkart follows a $210 million fund raising this past May and Flipkart’s acquisition of fashion retailing site Myntra, which also is venture backed.
I first covered Flipkart (and also Myntra) in my book Startup Asia, after meeting with the founders — Sachin Bansal and Binny Bansal — in Bangalore in 2010.
Keep reading post at Forbes, Flipkart.

Copying China Business Models In The U.S. Catches On As A New Tech Startup Trend - Quite the Reverse!

Globally minded startup teams in the U.S. are beginning to adopt Chinese business models and getting funding from American venture capitalists with China experience. An example of this newly unfolding trend is Curse, Inc., an online gaming media company in Huntsville, Alabama that just raised $10 million from Silicon Valley and Shanghai-based GGV Capital.
This new trend is the reverse of the copy-to-China phenomenon of a nearly a decade ago when look-alike sites of U.S. Internet brands such as Facebook, Google and Amazon sprung up in China and were largely funded by Sand Hill Road venture capitalists. It’s being fed by the globalization of tech trends among entrepreneurs and VCs alike.
Hubert Thieblot, the CEO of the U.S.-based gaming business Curse, doesn’t downplay how he got the idea for his startup’s new communications platform Curse Voice. It was inspired by Chinese startup YY.
Keep reading post at Forbes:
http://www.forbes.com/sites/rebeccafannin/2014/07/08/copying-china-business-models-in-the-u-s-catches-on-as-a-new-tech-startup-trend-quite-the-reverse/

 

China Tech Innovator With 200 Patents For LEDs Gains $80 Million More To Break Through

Silicon Dragon tours LatticePower lab in Nanchang

A lot of people are skeptical about China’s potential for technology innovation. But one Chinese company I wrote about in my book Silicon Dragon in 2008, and have been tracking since then, has certainly been setting some new standards in cleantech — and ability to raise venture investment.

LatticePower Corp., which grew out of research by physics professor Jiang Fengyi at his Nanchang University lab in China, claims to be the first company to commercially develop high-quality, reliable and affordable LED lighting — a major step in a goal of replacing conventional light bulbs and fixtures with energy-savings LED lights.

The China-based company is no lightweight. It’s filed for more than 200 global patents and attracted financial support from the World Bank and several leading venture capital investors.

LatticePower has been championed by its lead investor, Sonny Wu of Chinese-US venture firm GSR Ventures. He was tipped off to this ground-breaking technology research happening in Nanchang by a senior official of the Chinese government’s Ministry of Information Industry inn 2000, then sent a team there to investigate further and first backed the company in 2005.

Now, fast forward, and LatticePower has just lured in $80 million in financing to ramp up R&D and manufacturing in the U.S., build research teams in Korea and Taiwan, expand production in China, and finance sales growth globally.
Keep reading post at Forbes, China LED innovator.

Forbes link: http://www.forbes.com/sites/rebeccafannin/2014/07/01/china-tech-innovator-with-200-patents-for-leds-gains-80-million-more-to-break-through/

It's Not All Roses But Thorns Too As Alibaba IPO on NYSE Nears

As Alibaba prepares for its gigantic IPO on NYSE, more concerns over investor risks are popping up. Central to the issues is the corporate structure for Alibaba. Its use of a variable interest entity (VIE), which allows for foreign investment through an offshore holding company, has been under the recent spotlight of Capitol Hill — and Wall Street too. While VIEs have been the accepted way of investing in venture-backed China-based companies listed in the U.S., Chinese courts could strike down its legality in China, which in turn could leave investors with fewer rights. If that all sounds remote, remember what happened with AliPay. The financial business was spun out from Alibaba in 2011 and put under Jack Ma’s control to comply with Chinese regulations — a move that Yahoo YHOO +1.78%, which owns a 22.5% chunk of Alibaba, claims it was surprised by. Corporate governance issues are proving to be a thorn in other ways for the China-based e-commerce company. Keep reading post at Forbes: Alibaba IPO risks Link here: http://www.forbes.com/sites/rebeccafannin/2014/06/27/its-not-all-roses-but-thorns-too-for-alibaba-as-nyse-ipo-nears/

China Gets A Lot Of Credit In Meeker's Annual Tech Trends Analysis

China gets a big section on its own in Mary Meeker’s annual Internet report. That should be no big surprise considering the wave of innovation that’s been emerging for the past couple of years from China’s online and mobile markets. China’s mobile Internet has more critical mass than anywhere in the world, Meeker points out in the report that pegs the number of mobile internet users in China at nearly 500 million, 80 percent of total Internet users in the country. China Internet brands are also fast on the rise. A year ago, China counted only one Internet brand among the top 10 — Tencent — in a field dominated by U.S. brands such as Google, Microsoft and Facebook. This year, China has four among the top 10 – Alibaba, Tencent, Baidu and Sohu. China is proving to be a mobile commerce innovator too. Keep reading at Forbes, China Credit.

China's Twitter-like Weibo Tests Its Appeal With NASDAQ IPO

Interest in the IPO of Chinese microblogging site Weibo is building as fears over investing in China tech stocks have subsided despite lingering risks. Weibo is seeking to raise $380 million in a spinout from Chinese Internet portal SINA, the third China-based company to list in the U.S. in 2014 after a drought of China IPOs on Wall Street ended last year. Weibo’s public market debut will give China two major social media sites on U.S. exchanges – the equivalent of Twitter and Facebook. Renren RENN +2.76%, considered China’s Facebook, went public on the NYSE in 2011. Weibo, likened to Twitter but with more features, is set to go public this Thursday on NASDAQ. The timing is certainly better than two years ago. Keep reading Forbes post, @silicondragon onforb.es/1qZChKQ.

Silicon Dragon Highlights in Hong Kong, See You There April 15!

To sign up, click http://silicondragonhk2014.eventbrite.com An idea of what's in store at Silicon Dragon HK 2014: April 15, 2014 HK Cyberport http://www.youtube.com/watch?v=yqi9cMdDHgo

Bitcoin Exchange BTC China Faces Cooldown

The buzz, speculation and volatility over bitcoin as a digital currency is nowhere stronger than in China. Ask Bobby Lee, the CEO of China’s bitcoin exchange BTC China, based in Shanghai.
Bitcoin trading has cooled off considerably in China after a peak last year, when China contributed half the global trading volume in the digital currency, Lee says.

Transactions fell from a high of 100,000 daily late last year to 10,000 by this March while bitcoin prices dropped by 80 percent from a peak of $1200, he notes. Meanwhile, at least six bitcoin exchanges disappeared over the last two years in China, says Lee. He predicts that another two bitcoin exchanges will go bust over the next years.

China still counts six bitcoin exchanges, and BTC China, formed in 2011, is the largest one, says Lee, a former Yahoo YHOO +0.84% engineer in Silicon Valley for eight years and WalMart technology manager in China. Keep reading post at Forbes.
The cooldown has come after China’s central bank ruled that bitcoin cannot be used as a currency while Alibaba determined that the digital currency can’t be used as payment on its Taobao e-commerce website.
While China has not banned the trading of bitcoin, regulations threaten to curtail its development for financial transactions. Interviewed at CoinSummit in San Francisco, Lee cited the main issues with bitcoin in China (and elsewhere) are transparency, security, solvency and false claims about trading volumes to gain market share. See Silicon Dragon video interview with Lee.
BTC China's venture capital investor Ron Cao of Lightspeed China will be a featured speaker at Silicon Dragon 2014 in Hong Kong Cyberport.

Tencent Pushes WeChat Social Messaging App In US, Watch Out Whatsapp!

Tencent is taking the expansion of its popular Wechat social messaging app into the U.S. market quite seriously, as well it should with the recent $19 billion acquisition of rival service Whatsapp by Facebook.



Victoria Wu of Tencent's WeChat at
Silicon Dragon SF 2014 forum

The Chinese social media giant has hired Victoria Wu, a 30-something, articulate Stanford MBA grad with Boston Consulting and startup smarts as its ambassador for the WeChat brand in the U.S.  So serious is Tencent about creating a separate international identity for WeChat that Tencent management doesn’t want WeChat to be uttered in the same sentence as the company name. Is this about appearing to be less of a Chinese brand for the Shenzhen-based company? Could be.

Keep reading post at Forbes.com, WeChat.

Fog City's Unique Blend of East Meets West Feeds the Startup Culture

Leading venture capitalists and tech entrepreneurs are settling in San Francisco for its vibrant startup scene and capitalizing on international right from Fog City. They’re scaling companies in e-commerce, gaming, wearables, the Internet of things, and more that have funding from the likes of pros  Jerry Yang, John Sculley, Vinod Khosla, Marissa Mayer, Jack Ma, Kai-fu Lee, Vinod Khosla and Li Ka-shing.


Matt Zitzmann, Kamcord

Despite lots of would-be Silicon Valleys around the world from London to Hong Kong, the Bay Area continues to be a focal point. It’s the place that anyone interested in exploring innovation opportunities does not miss. The Bay Area is a crossroads uniting east and west.

Take for example some leading edge startups in San Francisco such as . . .

 

Keep reading this post at Forbes.com, Fog City.

China Tech Startup Nabs $120 Million To Go Global With Softbank's Support

CEO Wang presents new service

Chinese tech startups continue to make big strides forward. The latest example is mobile Internet company Wandoujia.
The Beijing-based, three-year-old startup just raised $120 million in one of the largest venture capital financings seen in China’s short Internet history. The funding from Softbank, Innovation Works and DCM was significant not only for its size but also for proof that the innovation culture is progressing in China — so far.
Like at more and more Chinese tech companies, the aims are high. Co-founder and CEO Junyu Wang has global ambitions for his innovative mobile app search engine and gateway across games, videos and music.  ”The product is first for Chinese users,” said Wang, “but over the long term, our aim is to create global technology.”
Keep reading this Silicon Dragon post at Forbes.com: Wandoujia.

China Tech Makes A Splash At Consumer Electronics Show In Vegas

Silicon Dragon's Rebecca Fannin
checks out China tech at CES

One thing for sure about this year’s Consumer Electronic Show – China tech was there, and big-time, among the latest and greatest wireless gadgets, self-driving cars, 3-D printing machines and wearable tech devices. The China presence at the show was one more demonstration that Chinese tech is going global — and in little more than a decade after entrepreneurs first got going in Beijing and Shanghai.
Of course, all the leading China brands — Alibaba, ZTE ZTE, Hisense and Huawei — had large and attractive booths displaying their latest wares front and center on the convention floor.   From what I observed, China had the biggest representation of all  overseas markets although the LG exhibit certainly was huge!
Keep reading this Silicon Dragon post at Forbes.